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HONG KONG: Asian markets were mixed Friday in rollercoaster trade after routs sparked in part by fears of tighter US monetary policy, with Tokyo ending higher a day after suffering its worst drop since the March 2011 quake-tsunami disaster.

Regional markets swung wildly after falling on Thursday on weak Chinese data and indications from US Federal Reserve chief Ben Bernanke that the Fed could start reducing its $85 billion-a-month bond-buying programme at one of the next few meetings.

Tokyo, which plunged 7.3 per cent in the previous session during frenzied selling, ended up 0.89 per cent, or 128.47 points, at 14,612.45.

The Nikkei had bounced back in the morning but plummeted by as much as 3.37 per cent after lunch before regaining ground.

Seoul closed up 0.22 per cent or 4.26 points at 1,973.45. Sydney dropped 1.56 per cent, or 78.9 points, to end the day at 4,983.5, after its worst week of trading for a year.

Hong Kong stocks closed down 0.23 per cent, or 51.01 points, at 22,618.67, but Shanghai finished up 0.57 per cent, or 12.86 points, at 2,288.53.

The volatility in Asia came after US stocks ended slightly lower Thursday, with the Dow Jones Industrial Average falling 0.08 per cent, or 12.67 points, to 15,294.50, with Wall Street boosted by better-than-expected US housing and jobless data.

European markets took a heavier hit, with most indices, including London, Frankfurt and Paris, dropping more than two per cent, following the Asian lead.

But European markets rebounded modestly at the start of trading Friday.

Toshikazu Horiuchi, a broker with IwaiCosmo Securities in Japan, said “extremely nervous” trading saw some investors lock in profits with others searching out bargains after Thursday's plunge.

“Players rushed to profit-taking after monitoring a moderate gain in the morning as they wanted to secure profit ahead of the weekend,” he said.

“There has not been any grave event that could change corporate earnings outlooks and what happened yesterday should be a correction to the recent excessive rises,” he said.

Prime Minister Shinzo Abe's pro-spending, pro-growth policies have weakened the yen more than 20 per cent against the dollar over the past six months helping to boost share prices nearly 60 per cent.

But some analysts had warned a correction was overdue.

The “slump is not necessarily the end of the bull market in Japanese equities, but the next few months will be much harder going”, London-based Capital Economics said in a note before afternoon trading.

Selling pressure Thursday was accelerated when British banking giant HSBC said its preliminary purchasing managers' index (PMI) for China fell to a seven-month low of 49.6 in May, putting it below the 50 mark indicating contraction.

Japanese stocks were also tracing zigzagging yen movements, with a weak yen tending to boost the market. The dollar was at 101.90 yen late in Asia compared to 101.82 yen Thursday in New York.

“We could be at a point of reckoning for the weak yen, which has powered the stock market's rise to the present,” said Investrust chief executive Hiroyuki Fukunaga.

“Players have switched from buying Nikkei futures and shorting the yen to doing the opposite, with individual investors piling in, adding to the volatility.”

The euro was at 132.44 yen from 131.72 yen in New York and at $1.2984 from $1.2935.
New York's main contract, West Texas Intermediate light sweet crude for July, was up four cents at $94.29 a barrel and Brent North Sea crude was down six cents at $102.38.

There was no trading Friday in Singapore, Bangkok or Kuala Lumpur.

Gold was at $1389.02 at 0835 GMT Friday from $1,388.57 late Thursday.

In other markets:

Manila closed down 0.62 per cent, or 45.47 points to 7,268.91. Top-traded Ayala Land led the retreat, dropping 0.57 per cent to 34.80 pesos. Bank of the Philippine Islands lost 2.03 per cent to 101.60 pesos, while Metropolitan Bank ended 0.59 per cent lower at 133.70 pesos.